Is Comex Spoofing the Precious Metals Deliveries?

in investing •  2 months ago  (edited)

 Great and Wonderful Friday Morning Folks,     

      Yes Gold is positive and trading at $1,409.90, up $3.20 after reaching $1,414.20 in the overnight with the low starting point at $1,405.30. Silver is still the most boring trade on the planet and is being dragged along with its price at $15.155, up 9/10ths of a penny after reaching $15.205 with its starting point at $15.12. Even the US Dollar is stagnant with its value at 96.61, down 5.6 points after dipping down to 96.50 before the support mechanism came with the high at 96.735. All this activity being led by Gold, happened before 5 am pst, the Comex open, and the London close.      

      Venezuela’s issues may not be front page news anymore but here, we like to bury the hatchet, so we watch the currencies with this nations Bolivar now pricing Gold at 14,081.38 proving the currency rallied as Gold loses 120.85 in Bolivar value with Silver trading at 151.361 dropping 1.448 Bolivar. Argentina’s Peso, a far more volatile currency (since Venezuela cut off 4 digits to the left of the decimal) now has Gold pegged at  58,797.62 sending Gold down 712.56 Pesos with Silver now at 632.045 taking away almost all of yesterday’s explosive price moves losing 8.252 in A-Pesos value. The Turkish Lira has Gold trading at 8,063.11 showing a minor loss of 3.32 T-Lira with Silver at 86.6603 down .1242 in T-Lira value.    

      July Silver deliveries are chugging along, adding more questions to the fray than any other point, with the demands for physical now at 550 fully paid for contracts proving an additional 9 contracts being added during yesterday’s activities, still waiting for the docs to arrive, and with Zero Volume up on the board so far this morning. With no buy or sells in place, we have no trading range. Our Resolute Longs are getting noticed out there as Alasdair Macleod is using the Whale descriptor to characterize our long term buyer taking on the shorts with the Overall Open Interest in Silver now at 218,122 Overnighters, proving 460 short contracts exited the trade while we observed another anomaly during yesterday’s negative trade.     

      I think I see spoofing going on in the July and Sept contracts that happened in between the physical purchases. Yesterday’s July trading range started out between $15.23 and $15.205 with a 10 lot buy order being filled before my missive (the posted Volume). I then witnessed a single order get filled, not at the high price but a lower price at $15.14 (and it was a single buy order) as the bid I posted yesterday offer 57 buys at $15.20 (no one took this higher price, why?). The next trade filled was at $15.105 (another 10 lot order) then later in the day another 10 lot got filled again at $15.105.     

      In between these trades I witnessed the “bid” prices in both the July and Sept contracts both equaling the same amount of buys and at the same time too! Not only that, but the quantities kept changing and in unison. Admittedly there may be another reason for seeing this, but what else can it be called if we simply keep seeing various “bids” pop up in constant change and are equal in both months bids but no one taking any of it? Right now I show a buy order in July at $15.005, with a 40 lot order in place. In Sept I show a bid at $15.085 it too asking for a 40 lot. Then they both changed, at the same time, to 46, 21, 28, 19, 8, 36, and all done under a minute’s time too. This is the sequence I am observing right now with no fills what so ever! The “asks” are not consistent at this time, but during yesterdays trades, again I witnessed after a July fill was made, that the “bids” had equal sell quantities throughout the day but only after the July contract traded.    

      I’ll leave room for being way off here, after all, I’m simply a professional trader who has been doing this for decades, and I should have seen this before that is if this has happened before. In earnest, I don’t know what I’m seeing, but without an explanation, I can only come up with Comex is Spoofing the Deliveries and using this mechanism to control the sell price. I even checked with my clearing firm to once again verify that these trade numbers are all coming from the exchanges. There is no breaking into this system to make up these numbers … period!     

      What we have is another unexplainable anomaly. If anyone has an alternative idea what else this could be, please send your view to the Bill’s (Holter and Murphy). The easiest view still is spoofing the trade, (with CFTC permission?). In the meantime, and while we continue to find cracks in the short traders system, we strongly suggest you own and hold in your hands, physical Silver and Gold. One day, they’re going to make you very happy indeed. Until then, have a great day, keep a positive attitude in the head and as always …   

Stay Strong! 

J. Johnson  

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Regarding the simultaneous bit and size change in Sept and July, it could be automated spread legging against visible or non-visible bids and offers in either futures or options. The HFT has made things crazy in terms of speed.

Best regards,

CIGA David G ….

  Thank you Bill for sharing and please thank CIGA David G for his input. 

 I’ve thought of this as well, even if it was high frequency trading, a trade would have to happen at a specific price both inside the specified contracts, and it would have to register in the Volumes and Open Interest + or - (but alas). This is the point I was trying to make, there are no registered trades for these posts. Are these the supposed EFP’s going to London or spoofing or? And if so, then they (these unregistered trades) control all the prices, not the COMEX traders. Also of note the combined amounts (of these spoofs?) are so high throughout the day, it would dwarf all Open Interest numbers as well as the Volumes and by many degrees of measure. These trades, if posted, would blow out the numbers we’ve been watching all these years to the moon and back. 

I’ve spoken to the exchange as well, I asked this “expert” (who has never traded and is not a registered broker but has been there for years) if these are possibly “dark pool” operations or “sovereign” trades. He directed me to the fraud division after he told me the same thing CIGA David stated.

   If these are HFT and they do not register a buy or a sell, did the trade really happen? At the close of Comex, we had 7 trades registered inside a trading range between $15.185 and $15.055 within the July delivery month. The volumes of these “ghost or spoof trades” would probably be outrageous … here’s my supporting math. IF I added the “Bid” quotes I gave Friday morning of these spoofs and multiply it by the length of time COMEX trades it would look like this : 46+21+28+19+8+36 = 158 (trades within one minute) X 1,320 minutes (that Comex trades, 22 hours a day x 60 ) = 208,560 unregistered trades in the month of July. Here’s an additional disclaimer; I only quoted the first numbers I saw within the first seconds (+ or –) of that minute I claimed in my write-up. 

Thank you so much for your input …. If you have any more thoughts on the subject, please offer them up.

Stay Strong!
J. Johnson